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Ground-breaking housing deals signed

Up to four pilot schemes to help local authorities build new homes across the UK will be given the green light within the next two months.

Last week Barking & Dagenham Borough Council approved the formation of a Local Housing Company with First Base to deliver 8,000 new homes in the east London borough.

Such local housing companies were proposed in last year’s Housing Green Paper and involve local councils offering their land in exchange for private developers funding housing on the land to deliver new homes, with both sides sharing the profits created.

When the scheme was announced 14 councils were chosen to pilot the deals, with four now understood to be on the verge of giving their approval to go ahead.

The Barking & Dagenham deal, which covers a 500-home development to be built by Bouygues, is the most advanced of the four with Newcastle City Council looking likely to be the next to approve its plans, having already started procurement for its private sector partner. Proposals in Nottingham and Sheffield are also hopeful of joining this first wave of schemes by being agreed before the Parliamentary recess in late July.

The remaining pilots will follow in two further waves, the second in the autumn with the third by January next year.

But plans to put together a panel of builders to be used by Local Housing Companies now look less certain.

English Partnerships’ strategic land director Duncan Innes is overseeing the development of the housing companies. He said the panel was still under consideration but that it might now be deemed unnecessary.

He said: “We are still grappling with whether it would help or not. Our role is to facilitate and so we are debating internally that intention. We want to know whether it would add another layer of complication.”

Analysis: Local Housing Companies on track

By Duncan Innes

We are making good progress on the Local Housing Companies programme and are moving towards the first developments taking place on site in 2009, as expected.

We are very much on track and the evidence from the procurement of Barking & Dagenham is that this is an idea that can work in terms of attracting private sector interest.

The crucial point in all this is that soon we will have pilots that have done sufficient due diligence for the councils involved to make a public commitment to developing Local Housing Companies.

We also have had a lot of councils express interest in following the pilots, forming their own Local Housing Companies.

It is sensible that we should get the pilots working to understand the process but this shows that the idea is popular and could be rolled out more widely.

Duncan Innes is strategic land director at English Partnerships